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FTSE fights back after bitcoin madness

by LLB Editor
20th May 21 11:00 am

After the rout, here comes the rebound. The FTSE 100 has shaken off the latest inflation and bitcoin inspired setback to trade higher on Thursday.

While the markets don’t want central banks to start raising interest rates too soon, they’re also clearly worried about rising prices running away and creating a situation where policymakers have no choice but to act.

Overnight minutes from the US Federal Reserve suggesting some members favour a tapering of asset purchases may actually reassure investors that the Fed can keep the economy bubbling away without letting it overheat.

While bitcoin’s slide was eventually averted after a very dramatic fall – its credentials as a means of protecting against rising prices look pretty tarnished, with gold shining in its stead,” says AJ Bell investment director Russ Mould.

“The risks associated with the pandemic haven’t gone away – while the developed world finally seems to be gaining some control over Covid-19 the situation is very different in emerging markets and this could be a threat to the commodity-focused firms on the FTSE, given a lot of demand comes from developing countries.”

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